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Tuesday, 2 August 2011

Notion is Coming...?

Notion VTec announced on 1st Aug 2011 that the negotiation with various parties to acquire its business/equity interest are still on-going. The Edge online put Notion as a stock to watch on 2nd Aug, but only a mere 131,000 shares changed hands. Notion's share price down 2sen to RM2.02. Seems like no one is interested.

Earlier in April this year, Notion did announce that it is in talk with certain parties for its stake. It was believed that a US base private equity firm is eyeing its shares or Nikon may consider to up its stake. However, nothing materialized and Notion finally announced in 1st July 2011 that the negotiation has been terminated due to disagreement in certain terms and conditions.

After exactly one month, Notion announces that the talk is re-ignited, not sure with the same parties or not. Almost on the same time, Notion's largest shareholder Choo Wing Hong who has 13.27% of Notion's shares, disposed 431,000 shares and 256,000 warrants. Is there anything to do with the equity interest talk? I don't know, but the amount of shares is quite small. I can't remember when is the last time Notion's major shareholders dispose their shares.

Last month TYK Capital has offered to acquire the entire business and privatize Eng Teknologi, also a HDD player. With the survival of PCs in doubt, HDD players share price have been vastly under-rated, which provides a good opportunity for merger or acquisition.

Is Notion a good short term buy or even long term investment? The industry is risky but the management seems good.

Anyway, the dead line for Eng takeover offer is 5th Aug 5pm. Let's see how it goes.